U.S. Hotel Construction Pipeline Expands 5% Year-on-Year in Q1 2025

The U.S. hotel construction pipeline grew 5% year-over-year (YOY) in Q1 2025, reaching 6,376 projects (749,561 rooms), according to Lodging Econometrics (LE). Key highlights include a 6% YOY rise in rooms and sustained momentum across development stages, driven by brand conversions and new project announcements.

Pipeline Breakdown

• Under Construction: 1,152 projects (145,368 rooms), up 1% in projects and 3% in rooms YOY.
• Scheduled Starts (Next 12 Months): 2,286 projects (263,370 rooms), rising 1% in both metrics YOY.
• Early Planning: 2,938 projects (340,823 rooms), surging 10% in projects and 13% in rooms YOY.

Segment Trends top Categories: 

Upscale, upper midscale, and midscale dominate, accounting for 75% of total projects:

• Upscale: 1,443 projects (179,295 rooms).
• Upper Midscale: 2,338 projects (226,349 rooms).
• Midscale: 974 projects (82,094 rooms), hitting a new high with a 9% YOY increase.
• Upper Upscale: Projects rose 10% YOY, reflecting demand for premium offerings.

Brand Conversions Hit Record Highs

• Conversions: 1,421 projects (136,668 rooms), up 13% in projects and 16% in rooms YOY, as owners prioritize cost-effective rebranding.

New Openings and Forecasts

• Q1 2025 Openings: 161 hotels (18,767 rooms).
• 2025 Projections: 740 new hotels (83,548 rooms) expected by year-end, a 1.5% supply growth.
• 2026 Outlook: 848 hotels (92,892 rooms) forecasted, adding 1.6% to supply.

Drivers and Outlook

• NPAs Surge: New project announcements jumped to 313 projects (37,912 rooms) in Q1, with construction starts up 21% in projects and 41% in rooms vs. Q4 2024.
• Market Resilience: Growth reflects confidence in leisure travel recovery and demand for diversified lodging options.

Key Takeaways:

• Pipeline Growth: 6,376 projects (749k+ rooms) signal robust sector confidence.
• Conversion Boom: Rebranding accelerates amid cost and labor pressures.

2025–2026 Supply: Over 1,500 new hotels (176k+ rooms) to enter the market.